Template:Isda Specified Entity summ: Difference between revisions

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It is relevant to the definition of {{{{{1}}}|Cross Default}} and {{{{{1}}}|Default under Specified Transaction}} in that it widens the effect of those provisions to include defaults by the parties specified.
It is relevant to the definition of {{{{{1}}}|Cross Default}} and {{{{{1}}}|Default under Specified Transaction}} in that it widens the effect of those provisions to include defaults by the parties specified.
===Nominating {{{{{1}}}|Specified Entities}} for yourself under {{isdaprov|DUST}} has its upsides===
For the most part, allowing any of your friends or relations to be named as your {{{{{1}}}|Specified Entity}} widens the range of vicissitudes of which you may fall foul, and therefore [[inure]]s solely for the benefit of your counterparty. In otherwords, if you can get away with it, don’t agree to name any of your affiliates as {{isdaprov|Specified Entities}}.
There is one exception, and that is Section {{isdaprov|5(a)(v)}} {{isdaprov|Default Under Specified Transaction}}).
of those provisions also to include defaults ''by'' the other side (and its {{{{{1}}}|Specified Entities}}) under their contracts with ''your'' {{{{{1}}}|Specified Entities}} — so there ''is'' some benefit to naming ''your'' [[affiliates]], friends and relations as {{{{{1}}}|Specified Entities}}. But given how unlikely you are to be actually monitoring how a counterparty performs with an affiliate, it’s more of a false comfort than a real one.

Revision as of 11:00, 2 October 2023

{{{{{1}}}|Specified Entity}} is so (~ cough ~) important that it is literally the first thing you see when you regard an ISDA {{{{{1}}}|Schedule}}.

Painstakingly set out, separately for {{{{{1}}}|Events of Default}} (namely {{{{{1}}}|DUST}} (Section {{{{{1}}}|5(a)(v)}}), {{{{{1}}}|Cross Default}} (Section {{{{{1}}}|5(a)(vi)}}) and {{{{{1}}}|Bankruptcy}} (Section {{{{{1}}}|5(a)(vii)}}) and the one {{{{{1}}}|Termination Event}} (Credit Event Upon Merger (Section {{{{{1}}}|5(b)(v)}} — as if you would want different Affiliates to trigger this event depending on precisely how they cork-screwed into the side of a hill), and jointly for the “{{{{{1}}}|Absence of Litigation}}” representation in Section {{{{{1}}}|3(c)}} of the 2002 ISDA.

A {{{{{1}}}|Specified Entity}} is any affiliate (or, in theory at any rate, even a non-affiliate, if your risk officer is a total cretin) of a counterparty to an ISDA Master Agreement which is designated in the relevant Schedule.

It is relevant to the definition of {{{{{1}}}|Cross Default}} and {{{{{1}}}|Default under Specified Transaction}} in that it widens the effect of those provisions to include defaults by the parties specified.

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